Thermoplastic polyurethanes (TPUs) are useful materials for numerous applications due in part to their outstanding resilience and ability to dissipate energy under large mechanical deformation. However, the mechanistic understanding of the origins of these mechanical properties at the molecular level remains elusive, largely due to the complex, heterogeneous structure of these materials, which arises from the segregation of chemically distinct segments into hard and soft domains. In this work, molecular simulations are used to identify the mechanism of mechanical response under large tensile deformation of a common thermoplastic polyurethane comprising 4,4′-diphenylmethane diisocyanate and n-butanediol (hard segment) and poly(tetramethylene oxide) (soft segment), with atomic resolution.The simulation employs a lamellar stack model constructed using the Interphase Monte Carlo method established previously for semicrystalline polymers, which models the interfacial zone between hard and soft domains with thermodynamically rigorous distributions of bridges, loops, and tails. Molecular-level mechanisms responsible for yield, toughening, and the Mullins effect are reported. We have found several distinct mechanisms for yield and plastic flow, which we categorize as (i) cavitation, (ii) chain pull-out, (iii) localized melting with shear band formation, and (iv) block slip. The activity of these mechanisms depends on the topology of chains in the soft domain and the direction of loading (e.g., parallel or perpendicular to the interface). Further insights regarding toughening mechanisms and the Mullins effect are obtained from cyclic loading, where mechanisms ii to iv were found to be irreversible and account for the superior resilience and dissipation at large tensile strains in thermoplastic polyurethanes.